Statute of Limitations on Debt FAQ

The statute of limitations on debt in California is the time period during which a creditor or debt collector can sue you to collect a debt. Once this period expires, the debt becomes "time-barred," meaning courts will dismiss collection lawsuits if you raise the statute of limitations as a defense. California's statute of limitations varies by debt type: written contracts (including most credit cards) have a 4-year limitation under Code of Civil Procedure section 337; oral agreements also have 2 years under section 339; promissory notes have 4 years under Commercial Code section 3118; and open accounts (like some store credit) have 4 years under section 337.

The clock typically starts running from the date of your last payment or the date you defaulted, whichever is later. It's crucial to understand that the statute of limitations is an affirmative defense; you must raise it in court or the collector can still win a judgment against you. The debt doesn't disappear when the statute expires; collectors can still contact you, but they cannot successfully sue you if you properly assert the defense.

Credit card debt in California has a 4-year statute of limitations under Code of Civil Procedure section 337, which governs actions on written contracts. Credit card agreements are considered written contracts because you typically sign or agree to written terms and conditions when opening the account. The 4-year period begins to run from the date of your last payment or the date the account was charged off by the original creditor, depending on the specific circumstances.

If you made a payment in January 2020 and never made another payment, the statute would generally expire in January 2024. However, determining the exact start date can be complex, and credit card companies sometimes argue for different interpretations. Some older credit card agreements might have been classified as open accounts with a 4-year limitation, but most modern credit card debts fall under the 4-year rule for written contracts. If a debt collector sues you for credit card debt, check the date of your last payment and assert the statute of limitations defense if more than four years have passed. Consult with an attorney if you're unsure about the applicable dates.

Time-barred debt refers to debt that has passed the statute of limitations for filing a lawsuit. While the underlying obligation may still technically exist, the creditor or collector has lost their legal remedy of suing you to collect. Understanding time-barred debt has important implications for how collectors can pursue you.

Under California's Rosenthal Act and recent amendments, collectors must disclose when a debt is time-barred and inform you that they cannot sue you to collect it. Collectors cannot threaten to sue on time-barred debt, as this constitutes a false threat of action they cannot legally take. They also cannot attempt to revive the debt by tricking you into making a payment or acknowledging the debt in writing. However, time-barred debt can still appear on your credit report (typically for 7 years from the date of first delinquency), collectors can still contact you requesting payment (unless you send a cease communication letter), and some collectors may still file suit hoping you won't raise the defense. If you're sued for time-barred debt, you must affirmatively raise the statute of limitations as a defense; courts won't apply it automatically.

Yes, making a payment on time-barred debt can restart the statute of limitations in California, giving the creditor a fresh period to sue you. This is one of the most important things to understand about old debts. Under California law, a partial payment can be considered an acknowledgment of the debt that restarts the clock. Even a small payment of $5 or $10 made on debt that's been dormant for years could give the collector another full 4 years (or whatever the applicable period) to sue you.

This is why debt collectors sometimes pressure consumers to make any payment at all, even a nominal amount, on very old debts. Similarly, a clear written acknowledgment that you owe the debt, promising to pay, or entering into a new payment arrangement can restart the statute of limitations. However, simply disputing the debt, requesting validation, or communicating with the collector without admitting liability does not restart the clock. If you're dealing with old debt, be extremely careful about making any payment or signing any acknowledgment. Before engaging with collectors on potentially time-barred debt, consult with a consumer attorney to understand your options.

California has different statutes of limitations depending on the type of debt and the documentation involved. Written contracts, which include most credit cards, car loans, and personal loans with signed agreements, have a 4-year limitation under Code of Civil Procedure section 337. Oral agreements, where terms were agreed verbally without a signed document, have a 2-year limitation under section 339. Promissory notes, formal written promises to pay (common in some loans), have 4 years under Commercial Code section 3118. Open accounts, like some retail store credit accounts without signed agreements, have 4 years under section 337.

Medical debt can be complicated; it typically falls under 2 years for oral agreements (if you just received services without signing) or 4 years if you signed a written payment agreement. Judgments are different; once a creditor gets a court judgment against you, they have 10 years to collect, and that period can be renewed. Student loans have special rules, and some have no statute of limitations. Understanding which category your debt falls into is essential for determining your rights and defenses.

Determining whether your debt is past the statute of limitations requires several pieces of information. First, identify the type of debt (credit card, medical, personal loan, etc.) to determine the applicable limitation period. Second, find the date of your last payment or the date of first default/charge-off, whichever occurred later, as this is typically when the clock started. Review old bank statements, credit reports, and any collection letters for this information.

Your credit report, available free at annualcreditreport.com, often shows the "date of first delinquency" which can help identify when the clock started. Third, calculate whether the applicable period has passed. For example, if you have credit card debt (4-year limit) and your last payment was in March 2019, the statute would have expired in March 2023. Be careful about certain complications: the statute might be "tolled" (paused) if you left California during the limitations period, and disputes exist about whether California's or another state's statute applies if you moved. If you're unsure, consult with a consumer attorney before taking any action that might restart the clock.

While debt collectors can technically file a lawsuit on time-barred debt, doing so violates California law and federal regulations. Under California's Rosenthal Act, as amended by SB 187, it is unlawful for a debt collector to bring suit or threaten to bring suit on time-barred debt. The Consumer Financial Protection Bureau's Regulation F similarly prohibits filing suit on debt the collector knows or should know is time-barred.

If a collector does sue you for time-barred debt, you have several options. You must file a response to the lawsuit and affirmatively assert the statute of limitations as a defense; if you don't respond, the collector may win by default even though the debt is time-barred. You may also have counterclaims against the collector for violating the Rosenthal Act and FDCPA, which could result in you recovering damages rather than paying the debt. Never ignore a lawsuit; even if you believe the debt is time-barred, you must respond and assert your defense. Consult with a consumer attorney immediately if you're sued, as they can help you raise the defense properly and pursue any counterclaims.

California law requires debt collectors to make specific disclosures when collecting time-barred debt, providing crucial protections for consumers. Under California Civil Code section 1788.52, when a collector knows or reasonably should know a debt is past the statute of limitations, they must include in their initial written communication: a statement that the debt has exceeded the statute of limitations, a statement that the collector will not sue to recover the debt, and a warning that making a payment or acknowledging the debt in writing may restart the statute of limitations.

This disclosure must be in at least 12-point type. The required language specifically states: "The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [name of debt collector] may continue to report it to credit reporting agencies as unpaid for as long as the law permits this reporting. This notice is required by law." If a collector fails to provide this disclosure, they may have violated California law, giving you grounds for a complaint or lawsuit. Keep all collection letters as evidence of compliance or non-compliance.

The statute of limitations and credit reporting periods are separate legal concepts that often cause confusion. The statute of limitations affects how long a creditor can sue you (4 years for most California debts), while credit reporting periods affect how long negative information can appear on your credit report (typically 7 years from the date of first delinquency under the Fair Credit Reporting Act). These periods run independently and don't affect each other.

A debt can be past the statute of limitations for lawsuits but still appear on your credit report. Conversely, a debt might be removed from your credit report but still be within the statute of limitations for collection lawsuits. This means a time-barred debt can still damage your credit score, and collectors can legally report time-barred debt to credit bureaus as long as they do so accurately and the 7-year credit reporting period hasn't expired. The 7-year credit reporting clock starts from the date of first delinquency (typically 180 days of non-payment) on the original account and cannot be extended by selling the debt to a new collector. If a collector reports a time-barred debt as if it were newer than it is, this violates the FCRA and gives you grounds for dispute.

If a collector contacts you about a very old debt, proceed carefully to protect your rights without inadvertently restarting the statute of limitations. First, do not make any payment or promise to pay, as this could restart the clock and give the collector 4 fresh years to sue you. Second, do not acknowledge in writing that you owe the debt. Third, request debt validation in writing within 30 days of first contact, which you can do without admitting liability. Your letter should simply request verification without acknowledging the debt is yours.

Fourth, research whether the debt is past the statute of limitations by checking your records for the date of last payment. Fifth, check whether the collector's communication includes the required time-barred debt disclosure under California Civil Code section 1788.52. If they're collecting time-barred debt without proper disclosure, they may have violated the law. Sixth, consider sending a cease communication letter if you want all contact to stop. Seventh, consult with a consumer attorney if you're sued or if you believe the collector has violated the law. Many consumer attorneys offer free consultations and work on contingency for debt collection abuse cases.